From www.inside.com
Ohmigod, It's Synergy! Teen People and Atlantic in Talks to Start Record Label
David Carr
12/8/2000 17:17

Teen People, having stormed the newsstand and reached profitability before the tender age of two, is looking for success in the record racks as well. Executives at the magazine are currently talking to their counterparts at fellow Time Warner property Atlantic Records about launching a music label.

''It's something that we are looking at,'' says Denise Keegan, director of brand development and communications at Teen People. ''We are always looking to explore other arenas where we can extend the brand equity.''

The magazine, which recently raised the circulation it promises advertisers from 1.5 million to 1.6 million, has a relentless focus on the exploding teen music scene, more so even than its bigger competitors, Seventeen, YM and Teen. Of the 12 covers this year, only two -- November's tribute to Charlie's Angels and an Olympics issue starring Serena Williams -- strayed outside the music world. 'N Sync, which graced March's cover, sold the most copies this year for Teen People, beating out other teen idols like the Backstreet Boys, Eminem, Sisqo, 98 Degrees, Blink 182 and Britney Spears. (The five bonus 'N Sync pull-out posters surely helped move those units.)

Keegan says that the thought of creating a record label -- which she says could be carried out with a company other than Atlantic -- came up after the magazine's enormous successes in various concert and radio promotions. ''In doing those events, we saw the power we could have in marketing music and it makes sense at this time in our development to take a look at it,'' says Keegan. ''We know what teens are listening to and we know what teens are watching.''

And Teen People could learn more very soon, if Time Warner's merger with America Online goes through as expected. It isn't hard to picture the new entity launching products of all sorts (online and off) to tap into its coveted readership of free-spending teens. Time Inc. officials had previously cited the youth market as an already assembled tribe on AOL that is ripe for Time Warner products.

Teen People's record label adventure wouldn't be the first time a magazine has looked at breaking into the music business. Most such efforts, however, have been little more than stamping a brand on a compilation album -- whether it's been Esquire or Vibe or even Family Circle. Keegan says Teen People has broader musical ambitions. According to a source, Teen People and Atlantic are looking at a number of artists, including LMNT (pronounced ''element''), a boy band whose members include three finalists from ABC's teen-star-search reality program, Making the Band. As discussed between the two potential partners, Atlantic would shoulder the majority of the A&R responsibilities (with input from Teen People) as well as promotion, recording, manufacturing and distribution; the magazine would handle most of marketing.

An executive at a competing magazine company that's done lots of brand extensions has his doubts about magazine-music synergy. ''I don't think people buy a record just because a magazine puts its name on it,'' he says, adding that when his magazine did imprints on musical compilations, they sold only moderately well.

But the People franchise is one of the most powerful brands going, hefty enough for Time Inc. to build a People store on Avenue of the Americas in Midtown Manhattan. Irma Zandl, president of trend research firm the Zandl Group, says she thinks a Teen People recording brand has enormous potential. ''They know a tremendous amount about this audience,'' she says. ''I could see them coming up with the next Spice Girls. They have a lot of influence and they could probably launch all sorts of young teen girl properties. I think it's kind of brilliant, really.''

A significant amount of the optimism is driven by demographics. The number of young people between the ages of 12 and 17 will increase by 7 percent in the next five years. And, according to Teenage Research Unlimited, teens spent $153 billion in 1999.

''We are in a big sort of growth mode, which is why you are seeing so much for teens in the music and publishing industries,'' says Zandl. ''For a long time, the boomers really sort of held sway, but I definitely think the baton has been passed. I mean, Madonna was recently pictured wearing a Britney Spears shirt, which I think it's a wonderful statement of what's happening.''